Consolidated Interim Report for the First Quarter of 2012 03.05

For the first time since 2008, the Group earned net profit from its main operations which totalled
EUR 179 thousand in the 1st quarter (EUR 0.01 per share). The
Group’s operating profit, excluding the net extraordinary gain in relation to the acquisition of Eesti Päevalehe AS,
amounted to EUR 755 thousand, which is 36% more than last year. EBITDA increased by
16% and totalled EUR 1 614 thousand. The Group’s revenue for the 1st
quarter exceeded the budget by 4% and EBITDA was better than the budget by 47%.
The EBITDA margin increased by 0.8 percentage points.

All segments earned a profit in the 1st
quarter. The online media segment showed the strongest results with its EBITDA
growth being the highest among the segments. While online media had a loss of
EUR 37 thousand in the 1st quarter of last year, it earned now a
profit of EUR 238 thousand, thus increasing by EUR 275 thousand. The sales of
online media increased by 18%, which also led to an increase in the share of
online media in the Group’s total sales, i.e. from 14.1% to 15.4%. In the 1st
quarter, the advertising sales of online media exceeded the advertising sales
of periodicals by 8% and its EBITDA also exceeded that of the periodicals
segment.

Delfi Lithuania contributed the most to the result of
online media. The small loss of Delfi Latvia incurred in the 1st
quarter is related to one-off salary payments. Delfi Latvia essentially more
than doubled its profit for the 1st quarter as compared to last
year. The loss of Delfi Ukraine continues to shrink due to increasing
advertising revenue.

In the periodicals segment, all companies had weaker
results than last year. In respect of AS Eesti Ajalehed this is attributable to
the fact that in the first two months of last year the company did not pay rent
for the premises of Eesti Päevaleht as Eesti Päevalehe AS was also the owner of
its premises. By normalising the result for the last year by excluding unpaid
rent, the EBITDA of AS Eesti Ajalehed in the 1st quarter of the
current year was higher than last year. Taking into consideration the 10% lower
revenue of AS Eesti Ajalehed, and higher normalised EBITDA, the company’s
efficiency has significantly improved after the completion of organisational
mergers with Eesti Päevalehe AS. The results of the periodicals segment are
still impacted by lower sales from book publishing.

In the printing services segment, there were no significant
changes, revenue increased by 14% and
EBITDA growth was 2%. Export sales increased by 20% and domestic sales increased
by 2%. Finland, Russia, Sweden and Norway are still the key export markets.

In March,
the next stage in the creation of the multi-media news space across media units
located in Estonia was completed. During this stage, a new editorial office of Daily
News was created on the basis of former editorial offices of Eesti Päevaleht
and Delfi. The editor in chief of Delfi Estonia, Urmo Soonvald became its new
head and also the editor in chief of Eesti Päevaleht.

The
establishment of Ekspress Group’s technology company OÜ EG Digital was
completed. The goal is to combine all our IT competences both in online as well
as digital media into one entity. The first step was to transfer Delfi IT’s
development team to the company. OÜ EG Digital does not constitute a separate
segment and its results are included within corporate functions.

The Group’s management is moderately optimistic
about growth over thenext quarters.
We expect growth in online media to continue, and the sales in periodicals and
printing services to stay at the same level as last year. Profit growth is
expected to be the highest in online media and in percentage terms especially
at Delfi Ukraine where the concept developed last year seems to be working.
This is evidenced by growing unique user numbers and increasing advertising
sales. We will continue with the development of digital publications of Eesti
Ekspress and Eesti Päevaleht. We have also started to actively seek
opportunities to increase the Group’s market share with acquisitions, primarily
in the area of online media and we also constantly try to identify investing
ideas in various areas related to IT and new media.